Are you serious? Why is this so bad to you? It is called SEXUAL ORIENTATION. I'm 14 and it is the year 2013 now, not 2010. Things are different, and more people are accepting of gays/lesbians/bisexuals. So STOP thinking it is due to molesters & the internet. It is just SEXUAL ORIENTATION!!!
If there is a positive to come out of this situation, it's that your son knew it was wrong to participate in what he did, so make sure you tell him that you are very happy/proud he came and told you what happened. I'd make contact with the parent/s of the other boy and discuss the incident with them. I feel you need to let your son know that he is not to participate in what he did again, and insist that if the boy (or anyone else for that matter) try to initiate a similar thing again, he is to tell a teacher and yourself straight away. It might be worth contacting the school and advising them of what happened also.
NO ... NO ... NO. NOT normal. Problem with a school that gives kids so much freedom to go into bathrooms together and have such activity . . . doesn't sound right to me.
And obviously, this is not normal. Somewhere down the line----- someone has been molested and is in contact with your son. It doesn't have to be an adult, many kids who are molested then go on to molest other children. Find out WHO's idea it was . . . and delve deeper. There is definately MORE to this story. Normal curiousity is one thing but your boy has either seen it (movie or otherwise) or had it happen to him.
It isn't his fault, don't be mad at him. But I'd be beyond concerned. A good therapist may help you get to the bottom of it as well. Good luck.